Coal magnate Jim Justice runs for governor

OREANDA-NEWS. May 13, 2015. US coal mining magnate Jim Justice is running for governor of West Virginia, just as his family's company is about to boost coal production by 16pc/yr.

Justice said yesterday he would seek the Democratic party's nomination for governor in next year's election. Forbes magazine recently estimated that Justice, who also owns the historic Greenbrier resort, is the wealthiest person in West Virginia, with a net worth of about \\$1.7bn.

The current governor, Democrat Earl Ray Tomblin, it term-limited and cannot seek another term.

The mining company owned by his family, Southern Coal, is expanding production, benefiting from new business for its metallurgical coal mines. Company-wide production will rise to 5mn short tons (4.5mn metric tonnes) from an earlier target of 4.3mn st/yr.

The company is increasing high-volatility coal production and staffing at its A&G No. 21 and No. 2 mines in Wise County, Virginia. Output will rise to 2mn st/yr (1.8mn metric tonnes/yr) from 1.3mn st/yr.

The Justice family in February repurchased the Bluestone coal mining operations from Russian group Mechel OAO for a price far lower than it got for selling the same mines to Mechel in 2009. The payment included \\$5mn in cash, royalty payments of \\$3/st and capped at \\$150mn, the assumption of about \\$140mn in liabilities, and payments from any future asset sales.

Mechel said Bluestone had been unprofitable since 2012.

Since buying back the operation, Southern has moved to reopen several mines. Along with new metallurgical coal deals, its sales include a long-term contract with American Electric Power, which accounts for much of the producer's steam coal output.

Mechel had idled the Bluestone mines early in 2014 and produced no coal last year. Coal production in 2013 was 1.8mn metric tonnes in 2013, down from 3.2mn st in 2012, according to a Mechel filing with the US Securities and Exchange Commission. Steam coal production was 600,000t in 2013, up from 2012.